We are officially in a recession in the UK and the housing market is crashing due to interest rates dramatically rising following base rate going from 0.1% to 3.0%. I predict house prices could fall up to 10% over the next 12 months or so. How will this effect property investing? What can you do to get rich from this recession? Well, most millionaires are made in recessions. In a recent video for my YouTube channel, I shared exactly what you should be doing in 2023. You can watch that full video above.
Just because there is a recession in the economy, doesn’t mean there needs to be a recession in your personal economy. There are ways to not only survive, but also thrive, through the recession regardless of your financial situation right now. In this article, I will give you three ways to do well in property during the recession. Make sure to watch the full video to understand exactly how to apply these strategies and more.
1. Deal sourcing
We are now in a buyers' market. As house prices are expected to keep falling, sellers are more willing to negotiate. This is particularly true for cash buyers. If you are a cash buyer, you are holding all the cards right now. Recessions allow people with capital to grow their assets and build great fortunes.
You are probably thinking, although that is great for them, this doesn’t help you. You don’t have huge amounts of capital in your bank account to buy property with. But there is a way for you to make money from this. Many rich people don’t want to spend their time searching property websites all day, viewing properties and negotiating deals. Become a deal sourcer and do all the hard work for them. Charge them a fee for each deal you pass on to them!
2. Serviced accommodation
Right now interest rates mean that it is hard to be profitable with a normal buy-to-let property. Indeed, many landlords will have a hard time finding profitable deals once they include these rates in their calculations. But there is an alternative, serviced accommodation. You can rent your property by the night on websites like Airbnb and make a much higher return on investment.
What’s more, guests do not have the same rights as tenants. A guest isn’t paying their bills? You can have them removed with no issues. With tenants there is a complex legal process you have to follow. In times of recession, serviced accommodation is a more flexible option.
3. Lease option agreements
Many sellers may not be able to get the price they want for their house right now. Sellers stuck in negative equity will be looking for a way out. Lease options are a great solution. You take over the property with the option to purchase it at a set price after a set number of years.
You can then get permission from the lender to use the house for serviced accommodation and profitably run the property until the market rebounds. Once the market is booming again, you can buy the property for below market value as agreed!
